A Flexible Plan for Reliable Electric Service and Cleaner Air

Power plants are responsible for about 40 percent of our country’s carbon dioxide emissions that drive climate change. We can cut carbon pollution from these plants while keeping the lights on. America has a more than 40-year track record showing environmental progress and electrical reliability are compatible. There’s no reason to fear that will change under the Clean Power Plan.

Opponents have repeatedly claimed that past clean air initiatives would compromise the reliability of electric service. But power grid planners, state regulators, and power companies have kept the lights on through every pollution-cutting program, while achieving a healthier environment for all.

Opponents are now crying wolf again, claiming the Clean Power Plan will compromise grid reliability by forcing too many coal plants to shutter too quickly, leaving a power supply shortfall.

But the Clean Power Plan offers unparalleled flexibility to manage electricity generation and critical incentives to actually improve grid reliability. That flexibility includes being able to use whatever power mix necessary to meet an overall carbon emissions budget. That flexibility, coupled with the pollution reduction standards, will encourage diversification of our energy mix in favor of cleaner, dependable resources like wind and solar, and energy efficiency. Opponents of the Clean Power Plan virtually ignore these flexibilities and incentives in claiming we’ll all be left in the dark.

The Clean Power Plan’s flexible design protects grid reliability

The Clean Power Plan offers remarkable implementation flexibility for states and power plant owners to design affordable, reliable state plans to meet each state’s targets over time:

Flexibility to use carbon trading markets to buy and sell carbon “allowances” and “credits” — typically measured as tons of carbon. These markets, well-proven in the United States and around the world, typically set declining limits on the allowances over time, and send clear financial signals to states and utilities on how to cut pollution affordably.

These markets allow fossil fueled power plants to purchase pollution credits allowing them to emit only a specific amount of carbon dioxide. States use the market revenue to invest in cleaner power and energy efficiency.

Flexibility to use an array of technologies and measures to meet the targets, including wind and solar power, energy efficiency, demand response (which uses incentives to induce customers to reduce energy use at specific times), rooftop solar and other distributed resources, energy storage, and other options.

A reminder: States are in no way limited to the four oft-discussed “building blocks” EPA used to set the Clean Power Plan’s targets — they can use some, all, or none of these building blocks in meeting the targets.

Flexibility for multi-state or regional cooperation to meet some or all of the required emissions reductions; a good example is the nine-state Regional Greenhouse Gas Initiative, which uses market-based solutions to cut pollution.

Flexibility to demonstrate compliance over multi-year averaging periods with periodic progress reports to the U.S. Environmental Protection Agency, rather than strict hourly, daily, or even monthly compliance periods.

Although states don’t have to use all of these options, using more of them will help to enhance reliability and increase affordability.

Some scenarios to show it can work

Let’s say that state regulators and grid operators believe grid reliability requires continuing to operate a specific coal plant past 2020, perhaps until the plant can be replaced with cleaner capacity. Will the plant be in violation of the Clean Power Plan because of its high carbon emissions over time? No: the plant can offset its emissions by investing in cleaner energy resources, including energy efficiency or renewable energy, or by purchasing emissions credits or allowances in the marketplace, or by a combination of several different solutions.

Another scenario: What happens if unexpected problems occur during implementation, such as construction delays in a large new gas-fired power plant, severe weather near the close of a compliance year, or an unexpected maintenance-related shutdown of a nuclear power plant? Again, dirtier plants can fill in to maintain grid reliability, but the cumulative net excess emissions need to be made up within the averaging period. States can protect against these unexpected problems by carrying a “bank” of early carbon credit reductions, borrowing or purchasing additional credits, or by making deeper reductions after the incident. There’s no need to excuse a state from compliance with the Clean Power Plan.

The point is that these market-based mechanisms give states considerable flexibility to depend on reliability-critical plants when necessary to maintain reliable electric service. This is exactly what’s occurred under the market-based systems for reducing pollutants causing acid rain and smog-forming pollution. There’s never been a complaint under these systems that a plant outage created a compliance crisis. The pollution allowance markets adjust, just as they will do here.

What about timing and reliability?

The Clean Power Plan’s proposed compliance schedule is gradual, beginning with achievable pollution reductions to be met over a 10-year average from 2020 to 2029. Contrary to the urban myth, there is no 2020 compliance deadline “cliff.” There is no requirement in the proposed plan to achieve the pollution standard’s 10-year average limit on Day One in 2020.

In short, states would have ample time to introduce energy efficiency and cleaner supply options while gradually reducing use of dirtier power plants, all while protecting grid reliability.

John Moore is a senior attorney with the Natural Resources Defense Council.He works primarily on high power electric grid policy reforms.